Feb. 18, 2009 — The V.I. Port Authority met Wednesday, with board members comparing actual numbers to their budget and lamenting the differences.
Board member Gordon A. Finch expressed alarm at the figures, and criticized staff who failed to produce a report expressing specific recommendations to cut expenses.
"The four horsemen of the apocalypse are riding this authority," Finch said. "We are not like some boards. We are not going to get a bailout."
Total operating revenue for the first quarter of fiscal year 2009 was $1.8 million less than projected and expenditures exceeded the budget by $3.4 million.
Air-passenger traffic was down by 19,939 for the same quarter in 2008, said Judith James, director of Administration and Finance.
Landing fees were reduced by $107,159, with private and unscheduled airplanes responsible for $79,677 of that figure.
The marine division is down by 11 ships for the first quarter. The ships that did come brought 110,980 fewer passengers in December than in December of 2007. The result was more than $1 million in revenue shortfalls for the division.
Two bright spots in the budget versus actual figures were for spaces rented for gift shops, at $45,545 above budget, and parking concessions at $36,309.
Salaries and wages were over budget by $151,870 for the quarter. Overtime costs went from $70,408 for December 2007 to $212,649 for December 2008. Double overtime jumped from $74,997 to $98,222 for the same period.
Weekend conveyor-belt breakdowns were blamed for the need for overtime at Cyril E. King Airport. The authority is reviewing bringing maintenance staff in for weekend repairs, according to Executive Director Kenn Hobson.
The V.I. government owes the authority $3.9 million in Customs collections and this affects other revenue areas such as interest income, according to the monthly financial report.
Some collection issues have resulted from a billing-period discrepancy between the West Indian Company Ltd., which acts as a ship's agent and bills on a 45-day period, and the authority's 30-day calendar.
The amount in question is some $24,000, according to Property Manager Denise Mills. Many cruise lines now pay the authority electronically, she said.
Board members expressed concern over $805,000 in annual revenue, which may be in jeopardy as a result of the Allen Stanford scandal. (See "St. Croix Projects Uncertain as Feds File Charges Against Stanford.") Stanford Real Estate Acquisition, part of the Stanford portfolio being investigated by the Securities and Exchange Commission, holds a lease with the authority for nearly 40 acres of land at Henry E. Rohlsen Airport.
The lease payments are up to date and have never been paid late. Payment for February has already been made, Mills said.
The 50-year lease requires improvements of $5 million over five years, and two years into its lease Stanford has had a groundbreaking and improved the land with underground utilities, according to Mills. The authority holds a security deposit equal to three months' rent.
The board also voted to require parking fees of $2 for employees of tenants at HERA.
In other action, the board approved writing off amounts that remained after bankruptcy settlements for US Airways and Delta Air Lines. The writeoff for US Airways totaled $257,037. Delta paid off its dept to the authority in 2005, but had accrued finance charges in the amount of $68,159, which the authority approved to write off.
The board also approved hiring a consultant for maximizing airport improvement program funds and their deployment. Jack Reynolds, a $168-per-hour expert in funding acquisition for small hub airports, will be called on an as-needed basis.
In addition to fundraising, Reynolds will help with environmental planning and mitigating the risk of bird strikes, Hobson said.
Millenium Racing, doing business as Crown Bay Gaming and Sports Lounge, received approval for several amendments to its lease. The off-track betting facility, which has 50 video lottery terminals, added Southland Gaming to its lease. The lounge will be able to offer Wi-Fi, hold private functions with music, and sell food on Fridays, Saturdays and Sundays.
While the facility serves alcohol, its management wanted to make sure that there was also food available for its customers when other food establishments in Crown Bay are closed.
Plans for the menu and supplier of the food are still in the works.
"It wouldn't be anything large," said Alex Joseph, general manager. "Wings and meatballs, salad trays, simple — not extravagant food."
The board denied Millenium's request to sell tours, with Crown Bay manager Diana Richardson citing an existing exclusive agreement.
The board approved a best and final offer for Adagio Entertainment Center, with reduced charges per square foot traded off for improvements to the proposed lease space in Crown Bay.
Staff members told the board that the authority has received a number of requests for reduced rents in light of the economic downturn and the reduction in the number of cruise ships coming into Crown Bay.
The board was reluctant to open the doors to what it perceives will be a flood of similar requests.
"It is a fair position," said board Chairman Cassan Pancham. "But I don't know if we can put our head in the sand. They [retailers and lessees] expected that season would carry them, but the season is very bad. Are we just going to say no to everybody else?"
Making concessions on a new lease for Adagio seems contradictory to telling existing lease holders that reductions will not be forthcoming, Pancham said..
The board approved paving the roadway in front of SeaFlight V.I. hanger in St. Croix.
The board also approved a contract with Rumina Construction Management to complete Lindbergh Bay Beach bathrooms, with an amount not to exceed the $208,000 funded for the project and with First Resort Painting to paint the metal frame which helps to support the roof in CEKA for $137,600.
The board authorized two change-order requests for ongoing dredging projects: extraction of 21 submerged pilings by HCS Consulting and Marine was approved for the dredging project at the Anne E. Abramson Marine facility, and an extension was granted until March 15 for the project at the East Gregorie Channel. The effort encountered a very compacted area of strata which requires use of a water jet to loosen before digging.
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